Lots of businesses don't last, too. Do you think they do no business at all before they fail?
Sure they do, either at reduced market continuing losses where no cost reductions can make them more competitive with other in their business sector that can offer the same product at lower price profitably.
To continue at a loss indefinitely by not being able to realize cost reductions and efficiency of your competitor is a guarantee of demise.
You seem to think business is a race to the lowest price.
Busines is a race to lowest price at a profit. If you particular business is less efficent than your competitor's to the point you cannot realize a gain, guess what you ultimately go out of business.
Businesses fail and new ones start up every day.
And the market price is set by those that are able to compete at the lowest price with a profit. Not those who continue an inefficient production and loss to the competitors.
Sales will go to the business offering the best values to their customers.
Precisely, and those who can do so with a profit set the bottomline price for given quality, while those who cannot do so with gain ultimately expire.
Very few markets are truly "commodity markets" where business is a race to lowest price ... and most of those are commercial markets as opposed to consumer markets. In fact, one of the core tenants of business is to find ways of differentiating your product or service so that it AVOIDS being commoditized so you CAN charge a higher price and still sell all you can make.
Most consumer markets are priced to value not priced to cost. That's why a Lexus sells at a higher premium over cost than a Toyota; that's why designer clothing sells for a premium over "generic" clothing; that's why marketing and branding are so important to business. There are LOTS of ways for a business to support vastly higher prices than their costs would imply. Why do you keep denying this?
Just go to your local grocery store and look on the shelves. How it is possible that there are so may different suppliers for the same product? How is it possible for any of them charge more than the generics and stay in business??
Your theoretical protestations are undone by the reality all around you.